Overview of FHFA and FHLBank Targeted Mission Activities
The Federal Housing Finance Agency (FHFA) was established by the Housing and Economic Recovery Act of 2008 (HERA) and is responsible for the supervision, regulation, and housing mission oversight of the 11 Federal Home Loan Banks (FHLBanks), the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac). As regulator of these entities, FHFA is responsible for ensuring that they operate in a safe and sound manner so that they serve as a reliable source of liquidity and funding for housing finance and community development.1 As part of their public mission, the FHLBanks play an important role in supporting affordable housing and community development throughout the country.
Support of Low-Income Housing and Community Development through FHLBanks’ Targeted Mission Activities
This report discusses the FHLBanks’ targeted mission activities to support low-income housing and community development in 2023.2, 3 The FHLBanks support a range of these activities through various programs: the statutorily mandated Affordable Housing Program (AHP), the statutorily mandated Community Investment Program (CIP), the voluntary Community Investment Cash Advance Program (CICA), and additional FHLBank voluntary programs.4 Under these programs, the FHLBanks provide loans (referred to as advances) and grants to their members or housing associates,5 as applicable, which use these funds to assist very low- and low- or moderate-income households and communities.6 Additionally, all FHLBanks support low-income housing and community development through voluntary programs that the FHLBanks offer at their discretion. Each year, the FHLBanks adopt Targeted Community Lending Plans (TCLPs), in which they identify and assess significant affordable housing needs in their districts to be addressed through their AHPs and describe how they will address identified credit needs and market opportunities in their districts for targeted community lending.7
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1 Since 2008, FHFA has also served as conservator of Fannie Mae and Freddie Mac.
2 The Federal Home Loan Bank Act requires FHFA to monitor and report annually to the Advisory Council for each FHLBank, the support of low-income housing and community development by the FHLBanks and the utilization of FHLBank advances for these purposes. 12 U.S.C. § 1430(j)(12).
3 This report was previously titled the “Low-Income Housing and Community Development Activities of the Federal Home Loan Banks.” The title has been changed for this report to reflect its coverage of additional FHLBank targeted mission activities.
4 See 12 U.S.C. § 1430(i) and (j). The CICA regulation defines CICA programs to include AHP, CIP, and targeted economic development advance or grant programs established by an FHLBank. 12 C.F.R. § 1292.1. However, because AHP and CIP are specifically required by statute, they are generally described separately from other programs under the CICA umbrella. This practice is followed in this report. The AHP is governed separately by FHFA’s AHP regulation. 12 C.F.R. part 1291. Some FHLBanks also provide voluntary community development and housing subsidy programs that do not fall under this statutory and regulatory framework.
5 See 12 U.S.C. § 1430(j)(10); 12 C.F.R. part 1292. Housing associates are defined to include eligible state and local housing finance agencies. Housing associates are not FHLBank members, but FHLBanks may offer them advance products except CIP advances. See 12 U.S.C. § 1430b; 12 C.F.R. part 1264.
6 Low- or moderate-income households are defined as households with incomes of 80 percent or less of Area Median Income (AMI). Very low-income households are defined as households with incomes of 50 percent or less of AMI. 12 C.F.R. § 1291.1.
7 12 C.F.R. § 1290.6(a)(5)(ii).